CODING: Words stricken are deletions; words underlined are additions.
HOUSE AMENDMENT
Bill No. CS/HB 397
Amendment No. (for drafter's use only)
CHAMBER ACTION
Senate House
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5 ORIGINAL STAMP BELOW
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11 Representative(s) Rayson and Cosgrove offered the following:
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13 Substitute Amendment for Amendment (091415) (with title
14 amendment)
15 On page 8, line 11 through page 11, line 18
16 remove from the bill: all of said lines
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18 and insert in lieu thereof:
19 (8)(a) For the purposes of subsections (6) and (7),
20 benefits of an individual accident and health insurance policy
21 form, including Medicare supplement policies as defined in s.
22 627.672, when authorized by rules adopted by the department,
23 and excluding long-term care insurance policies as defined in
24 s. 627.9404, and other policy forms under which more than 50
25 percent of the policies are issued to individuals age 65 and
26 over, are deemed to be reasonable in relation to premium rates
27 if the rates are filed pursuant to a loss ratio guarantee and
28 both the initial rates and the durational and lifetime loss
29 ratios have been approved by the department, and such benefits
30 shall continue to be deemed reasonable for renewal rates while
31 the insurer complies with such guarantee, provided the
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HOUSE AMENDMENT
Bill No. CS/HB 397
Amendment No. (for drafter's use only)
1 currently expected lifetime loss ratio is not more than 5
2 percent less than the filed lifetime loss ratio as certified
3 to by an actuary. The department shall have the right to
4 bring an administrative action should it deem that the
5 lifetime loss ratio will not be met. For Medicare supplement
6 filings, the department may withdraw a previously approved
7 filing which was made pursuant to a loss ratio guarantee if it
8 determines that the filing is not in compliance with ss.
9 627.671-627.675 or the currently expected lifetime loss ratio
10 is less than the filed lifetime loss ratio as certified by an
11 actuary in the initial guaranteed loss ratio filing. If this
12 section conflicts with ss. 627.671-627.675, ss.
13 627.671-627.675 shall control.
14 (b) The renewal premium rates shall be deemed to be
15 approved upon filing with the department if the filing is
16 accompanied by the most current approved loss ratio guarantee.
17 The loss ratio guarantee shall be in writing, shall be signed
18 by an officer of the insurer, and shall contain at least:
19 1. A recitation of the anticipated lifetime and
20 durational target loss ratios contained in the actuarial
21 memorandum filed with the policy form when it was originally
22 approved. The durational target loss ratios shall be
23 calculated for 1-year experience periods. If statutory
24 changes have rendered any portion of such actuarial memorandum
25 obsolete, the loss ratio guarantee shall also include an
26 amendment to the actuarial memorandum reflecting current law
27 and containing new lifetime and durational loss ratio targets.
28 2. A guarantee that the applicable loss ratios for the
29 experience period in which the new rates will take effect, and
30 for each experience period thereafter until new rates are
31 filed, will meet the loss ratios referred to in subparagraph
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HOUSE AMENDMENT
Bill No. CS/HB 397
Amendment No. (for drafter's use only)
1 1.
2 3. A guarantee that the applicable loss ratio results
3 for the experience period will be independently audited at the
4 insurer's expense. The audit shall be performed in the second
5 calendar quarter of the year following the end of the
6 experience period, and the audited results shall be reported
7 to the department no later than the end of such quarter. The
8 department shall establish by rule the minimum information
9 reasonably necessary to be included in the report. The audit
10 shall be done in accordance with accepted accounting and
11 actuarial principles.
12 4. A guarantee that affected policyholders in this
13 state shall be issued a proportional refund, based on the
14 premium earned, of the amount necessary to bring the
15 applicable experience period loss ratio up to the durational
16 target loss ratio referred to in subparagraph 1. The refund
17 shall be made to all policyholders in this state who are
18 insured under the applicable policy form as of the last day of
19 the experience period, except that no refund need be made to a
20 policyholder in an amount less than $10. Refunds less than $10
21 shall be aggregated and paid pro rata to the policyholders
22 receiving refunds. The refund shall include interest at the
23 then-current variable loan interest rate for life insurance
24 policies established by the National Association of Insurance
25 Commissioners, from the end of the experience period until the
26 date of payment. Payments shall be made during the third
27 calendar quarter of the year following the experience period
28 for which a refund is determined to be due. However, no
29 refunds shall be made until 60 days after the filing of the
30 audit report in order that the department has adequate time to
31 review the report.
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HOUSE AMENDMENT
Bill No. CS/HB 397
Amendment No. (for drafter's use only)
1 5. A guarantee that if the applicable loss ratio
2 exceeds the durational target loss ratio for that experience
3 period by more than 20 percent, provided there are at least
4 2,000 policyholders on the form nationwide or, if not, then
5 accumulated each calendar year until 2,000 policyholder years
6 is reached, the insurer, if directed by the department, shall
7 withdraw the policy form for the purposes of issuing new
8 policies.
9 (c) As used in this subsection:
10 1. "Loss ratio" means the ratio of incurred claims to
11 earned premium.
12 2. "Applicable loss ratio" means the loss ratio
13 attributable solely to this state if there are 2,000 or more
14 policyholders in the state. If there are 500 or more
15 policyholders in this state but less than 2,000, it is the
16 linear interpolation of the nationwide loss ratio and the loss
17 ratio for this state. If there are less than 500
18 policyholders in this state, it is the nationwide loss ratio.
19 3. "Experience period" means the period, ordinarily a
20 calendar year, for which a loss ratio guarantee is calculated.
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24 And the title is amended as follows:
25 On page 1, line 5,
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27 after the semicolon insert:
28 repealing language relating to loss ratio
29 guarantee;
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hmo0006 02:46 pm 00397-0090-963333